SALT LAKE CITY (AP) — Utah Gov. Gary Herbert increased his tax-cut proposal to $225 million on Wednesday as he pressed his call to restructure the tax system by putting new taxes on services, a project he called the state’s No. 1 priority.

The Republican governor gave his 10th State of the State address shortly after GOP lawmakers advanced a contentious plan to scale-back a Medicaid expansion approved by voters after years of refusal at the Capitol.

Herbert said the voter-approved measure needs some “common-sense adjustments” but can still be implemented “without delay.”

Democrats, meanwhile, reproached their colleagues for advancing proposals that would reduce the number of people covered and impose work requirements.

“The Legislature should never be quick to overrule the will of Utah voters,” said House minority leader Rep. Brian King.

Senate minority leader Karen Mayne, meanwhile, said tax cuts are “not good policy during a time of economic prosperity,” suggesting the money be invested in education and public safety instead.

Herbert said his plan to cut taxes by slashing the state sales tax rate from 4.85 percent to 1.75 percent will benefit lower and middle income families.

Utah Gov. Gary Herbert delivers his State of the State address at the Utah State Capitol, Wednesday, Jan. 30, 2019, in Salt Lake City. Behind Herbert are Speaker of the House Brad Wilson, left, R-Kaysville, and Senate President Stuart Adams, R-Layton. (Spenser Heaps/The Deseret News via AP, Pool)

The new tax-cut figure Herbert named would be the largest in state history, and matches a higher number proposed by House Speaker Brad Wilson as the state enjoys a $1 billion surplus.

Adding new taxes won’t be easy, but it’s necessary to keep the state on solid financial footing in a changing economy, he said.

For example, he says the state taxes buggy whips but not Uber or Lyft rides.

Herbert also laid out specific proposals to improve the state’s air quality, which can be among the worst in the country when pollution settles into the state’s valleys in winter.

Herbert wants to spend $100 million to improve air quality, and said the state could lead the charge by encouraging employees to use public transit or telecommute, replacing dirty state vehicles with electric automobiles.

On education, he said he supports investing in school safety and mental-health services, increasing in per-student spending and offering computer science in every middle school. He also got behind a bill that would require instruction on capitalist economic principles, drawing applause from lawmakers in the audience.

Jennie Taylor, center, wife of slain Utah National Guard Maj. Brent Taylor, and Tammy Taylor, Maj. Taylor’s mother, stand as the House chamber audience rises to honor the families of Utahns who fell in the line of duty in the last year during Utah Gov. Gary Herbert’s State of the State address at the Utah State Capitol Wednesday, Jan. 30, 2019, in Salt Lake City. (Spenser Heaps/Deseret News, via AP, Pool)

“Frankly, I have been disturbed by some of the rising generation’s fascination with socialism,” he said. “It is imperative that Utah high school graduates understand … the basic economic principles of free-market capitalism that have made America great.”

He ended his speech with a reference to the 150th anniversary of the transcontinental railroad in Utah, and recognizing the thousands of Chinese workers whose names went unrecorded.

“The people who literally reunited our nation following the Civil War were the nation’s outcasts — freed slaves, Irish immigrants, exiled Mormons and underpaid Chinese workers, among others,” he said. “I hope that we take that into account as we start another challenging legislative session.”

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